Making disruption work

Making disruption work

If there is one constant in business, it’s that change will always happen, whether we like it or not. Certainly the past decade has seen more transformative disruption than much of the previous half century. Markets, models, economies — all have seen seismic shifts.

It was this fact that formed the basis of a recent Thomson Reuters roundtable event in Singapore, where business leaders from Asia Pacific debated the pressing issues facing their organisations: will automation of back office processes really revolutionise reporting, compliance and FP&A? What next for the skills debate? What can companies do to attract the best talent and retrain existing headcount? Will their sectors undergo the level of disruption we’re seeing elsewhere?

The event took place a few months after the publication of a landmark survey into attitudes towards disruption. The ‘Disruptor Survey’ revealed that senior finance figures in Asia Pacific are especially concerned with the so-called war for talent: 57% of survey respondents cited people issues as one of the leading challenges facing their organisation (that figure drops to 42% in the US and 44% in Europe).

So where do Asia Pacific leaders believe this is going? Are there enough skilled people coming into the market? Are the training institutes focusing on developing the right skills? And are companies doing enough to attract millennials, many of whom have a different set of priorities to previous generations of finance and IT staff?

The war for talent

One guest, whose company aspires to be an employer of choice, said that meeting the expectations of young graduates is a challenge. "A young graduate looks at Group Technology, UBS, and says ‘I want to come in and work on #fintech.’ Well, sorry, but your first job is going to be doing support on a 40-year-old mainframe," explained Neil McKay, a director in UBS’s Group Technology function.

McKay believes that for some established players there’s a risk that if they are not seen as being disruptive and innovating, then they’re not offering the millennial generation entering the workforce the roles that they want. “If you’re not innovating you’re seeing flight risk: we do see that with graduates. The typical conversation goes: "I came in here and this is not what it said on the tin and I want to go and work for a tech start-up instead."

Everyone present agreed that, in general, Asia Pacific has some catching up to do when it comes to adopting a more modern approach to acquiring the necessary skills for the business. But incorporating technology into that equation only adds to the conundrum.

Automate to accumulate

A lot of attention has focused on some of the supposed downsides for workers as the AI and machine-learning revolution continues — roles becoming redundant, reporting lines changing, certain strata of staff ill-equipped to transition into other roles. As Brian Peccarelli, president of Tax & Accounting at Thomson Reuters, conceded, while automation and process improvement will inevitably affect gross headcount numbers, for skilled employees it presents an opportunity to add greater value to the business. But business — and government — must address real concerns.

"The data coming out from the World Economic Forum suggests a disparity in jobs: there’s a danger of a surplus of low-skilled labour and shortages of talent to fill the high-tech job openings," he told guests. "I know, particularly in the tech industry right now, that there are huge shortages and that that sector is trying to attract people and talent with those skills.

"There’s a lot of conversation about how you go about this: how do you upskill? How many countries, right now, are teaching those skills in first grade?" he said.

"There’s a lot of talk about various countries around the world shaking up their education system, so that as well as teaching reading, writing and arithmetic, they’re adding programming. And that isn’t so that they can all be programmers, but so they will be able to run factories in the future and get jobs in, for example, the media."

Peccarelli pointed out that the conversation at events like the World Economic Forum has moved on from the idea of robots replacing humans. "It’s about the augmentation of the human by this technology to make the human better and more productive. Technology will allow humans to add greater value by stripping out some of the other work.

"The attitude has flipped: it isn’t so much about the displacement of existing roles and skills, as about the people and how smart people will embrace it. It’s looking at it as a positive and embracing that technological change and moving it forward."

Designed for life

However, while the potential benefits of disruptive technology in general — and automation in particular — are plain for many in finance to see, senior business leaders must embrace change to ensure they benefit from it.

UBS’s Neil McKay said that that attitude of technology being something that was ‘done to you’ must change to something that people embrace. He cited, as an example, the work around robotic process automation “which 10 years ago would have been in the domain of technologists. At UBS, we run all of that straight out of the operations function, and IT is a secondary supporting player.

"That’s possible because there are tools that allow you to bring a lot of these benefits of technology into your business without having deep technological expertise internally.

"Ten years ago, vendors like Tableau might have approached the technology function of UBS, but now they can go directly to the front office and bypass us.”

That fear — being bypassed by the increased speed of tech developments — was a recurrent theme. CFOs cannot, it was agreed, simply sit back and expect the title to protect them from the winds of change. Indeed Duncan Foster, regional sales manager for Oracle+NetSuite, cited a recent article that argued the CFO had achieved the position at the right hand of the CEO because, in recent decades, capital was a key strength of organisations.

"Nowadays, capital is far less constrained, and the cost of capital is incredibly low," said Foster. "Today, it’s about where you obtain innovation, new ideas and disruption for what businesses need to succeed, as opposed to the traditional CFO skills that are based around productivity, efficiency and predictable outcomes."

Staying relevant

So given all that, how can the CFO’s role avoid irrelevance? Vishnu Nanduri, a senior manager for predictive analytics at Prudential Singapore, argued that despite the threat of change, the savvy CFO does have a unique role to play in the business of the future.

"As a finance function, the amount of data we have is just enormous, and no other function in any organisation would have access to all the data. How we use that data to drive the business is something that will define how we move forward as a function."

However, Vishnu argued that most large organisations don’t use data as well as they need to. The answer, he believes, lies in clever recruitment. "DBS Bank is hiring 200 developers just to look to data analytics and how to drive organisational behaviours and business decisions," he said. "That’s the kind of thing we as a function need to liberate to maintain our relevance."

For businesses in Asia Pacific, adjusting to this more forward-thinking approach is happening, albeit slowly. The Thomson Reuters Disruptor Survey revealed that a large majority of businesses in the region saw tech disruption in particular as a major opportunity in the coming decades.

And while disruptive energy is now being seen across the board, how to effectively respond to it is now a serious preoccupation. One way is to incorporate it into existing structures, to harness the power of change and transform existing staff, assets and systems into engines of innovation.

Fostering innovation

Kristina Noa Nemeth agreed that sponsorship from the top was critical in fostering the spirit of innovation. Based in Singapore, she heads PayPal’s Procure to Pay Finance Operations processes for EMEA and Asia Pacific, a role that sees her act as a key driver for process scalability and automation, as well as outsourced vendor relationship optimisation.

"We’ve got an online platform where we can submit ideas about anything that might, ultimately, impact the customer experience."

Noa Nemeth revealed that PayPal runs an innovation lab that takes on start-ups with a feasible prototype of a product or service, providing them with workspace and mentoring resources.

"We embrace innovations that aren’t necessarily related to our business or industry,” she said. “If there is something feasible in an idea, it goes ahead."

PayPal’s approach is likely to become more widespread, many present agreed, given the increased need to collaborate and to remain flexible, agile and able to respond to changes in the market.

Ultimately, the energy in Asia Pacific is one of its strengths. That, coupled with improving standards in education, increased tech investment and greater emphasis on long-term strategic planning, leaves businesses there ideally placed not only to absorb and survive disruption, but to harness it in order to thrive.